It goes without saying that the recession is forcing all sorts of Americans to confront the prospect of financial ruin. But lawyers have a particular cross to bear, one that involves a crushing amount of educational debt that was supposed to be serviced by the income from lucrative, highly secure law firm jobs. Now that job security is a thing of a past, there are a lot of lawyers who need a financial makeover. Sunday’s Chicago Tribune provided advice for struggling attorneys:
Aukse Rimas of Chicago is a trial attorney with a big new raise and a promising career. But she is losing sleep over what the recession-wracked economy could do to her.
The 29-year-old is juggling $225,547 in education loans and credit card debt–about three years’ worth of her $75,000 annual salary. She has a modest retirement nest egg and virtually no savings.
Something tells me that the financial experts are going to tell Aukse to spend less money. I haven’t read the full article or anything, but every financial planner I’ve ever talked to essentially tells me “your intelligence profile indicates that you’re too stupid to follow a budget.”
Am I right? After the jump.
The Tribune (which, you know, really isn’t in the best position to be giving financial advice just at the moment) passes along these helpful tips:
Although her debts are higher than most, Rimas’s situation rings true for many nervous workers struggling with multiple loans. But, experts said, there is a reason for hope.
The key, they say, is to watch spending carefully and channel money saved toward paying off debts as quickly as possible.
In fairness, critics will point out that Aukse Rimas has a lot of room for spending cuts:
Like many people carrying heavy debt loads, Rimas acknowledges she made some financial mistakes before getting to this point.
There was an expensive graduation trip to Costa Rica. Then she signed on for an unpaid internship and a part-time job after law school, bridging the gap between her income and expenses with credit cards that added $7,000 in debt.
Shopping and going out with friends ate up her income when she got her first job and lived at home rent-free. The spending continued when she moved to Chicago’s Wrigleyville neighborhood and furnished a new apartment on credit. Monthly expenses, including a health club membership, grew.
I’m sure most of Rimas’s critics got out of school and moved right to a windowless, basement apartment and spent the last few years welding clothes out of empty Spam tins. But in Rimas’s defense, she hasn’t just been spending money on herself. Outside the office, Rimas is heavily involved in philanthropy. She regularly participates in fundraising and events for the Special Olympics, JDRF, the ASPCA and PAWS, the Susan G. Komen Foundation, the American Lung Association, WTTW and PBS, Cubs Care and Chicago Volunteer Legal Services.
And, her cat got sick:
After a trip to the veterinary emergency room and several specialists, she charged $6,000 to her growing list of credit cards bills.
But in this terrible economy, people need to make cuts wherever they can. The Tribune’s experts taught her how to
grovel negotiate with her credit card companies and save several hundred dollars a month.
Loans. Boy. I don’t know.
Chicago lawyer with $225,000 in debt has reason to hope [Chicago Tribune]